British Columbia boosts projected 2018-19 budget surplus

VANCOUVER (Reuters) - The British Columbia government on Friday raised its 2018-19 budget surplus projection by C$450 million ($341.76 million) on higher tax revenue, partially offset by more spending on wildfire management in the Canadian West Coast province.

The downtown of Vancouver, British Columbia is pictured at sunset July 31, 2013. REUTERS/Andy Clark

The 2018-19 surplus outlook rose to C$669 million, compared with C$219 million projected in February, the government said in a statement.

Revenue is estimated to reach C$55.8 billion in fiscal 2018-19, 3 percent higher than projected in February.

The boost is mostly due to higher-than-expected revenue gains from personal income tax, corporate taxes and resource revenue, which was lifted by strong forestry and mining revenues, though partially offset by lower natural gas royalty revenue.

Fire management costs are expected to top C$541 million in 2018-19, up from a previously budgeted C$64 million, as the province has battled one of its worst-ever wildfire seasons.

Property transfer tax revenue projections have fallen as the province’s runaway real estate market has cooled in recent months after British Columbia moved to crack down on real estate speculation with new taxes and other measures.

“The former government’s decision to rely on a speculative real estate market was unsustainable and irresponsible, leaving people without affordable homes and businesses without workers,” said Finance Minister Carole James in a statement.

British Columbia, whose debt is rated triple-A, forecast total debt of $68.5 billion in 2018-19, and said the 2018-19 dept-to-GDP ratio estimate improved slightly to 15.3 percent from 15.5 percent.

The province also boosted its surplus projected for 2019-20 to C$810 million from C$281 million, but lowered it to C$184 million in 2020-21 from a previous C$284 million.

It noted that numerous risks remain that could affect projections, including the ongoing North American Free Trade Agreement talks with the United States and Mexico, the chance of more wildfires, and potential for interest rate hikes.

Reporting by Julie Gordon in Vancouver; Editing by James Dalgleish and Richard Chang